Griffith v Davidson, a recent Ontario Superior Court of Justice decision, has confirmed that placing a property in joint tenancy means sharing the property equally on relationship breakdown. The question before the court (on appeal from an arbitration) was whether the common law wife held the property on resulting trust for the common law husband, or whether the common law husband (“husband”) had made a gift to the common law wife (“wife”) of half the property.
The husband argued that wife did not contribute at all to the purchase or maintenance of the property. He claimed that he had only put the property in joint names for estate planning purposes, so that the wife would get the property by right of survivorship if the husband pre-deceased her. When their relationship broke down, the husband took the position that a resulting trust applied i.e. that the wife was holding her share of the property in trust for him, such that the entire property properly belonged to him. The wife argued that the husband had made a gift of one half of the property to her.
It is the husband’s intention at the time of purchase that is relevant in this case. The court held that the fact that the husband’s Will and estate plan at the time of purchase treated the property as a joint asset was significant and sufficient evidence to conclude that he had made a gift to the wife of one half of the property.
How could this fight have been avoided? Simple. The parties should have entered into a cohabitation agreement to address with how the property would be treated in the event of relationship breakdown. The contract would have determined how the property would be divided in the event of the parties’ separation or in the case of a death. Instead of paying minimal legal fees up front for a contract, these parties paid significant legal fees in order to litigate the issue after the fact.
